AMP Capital rebuffs Morningstar

AMP Capital has knocked back research house Morningstar in its latest round of NZ equities manager reviews.

In a communique issued last Friday, Morningstar said AMP had opted out of the process for its NZ shares funds.

“We have discontinued coverage of AMP Capital Strategic NZ Shares as AMP Capital has chosen to decline our invitation to be part of the review,” the Morningstar research note says. “As a result, this strategy is ‘Not Ratable’. The previous rating was Under Review following continued staff turnover and uncertainty surrounding the strategy’s future.”

However, the Australian-based research house said the underlying AMP NZ shares strategy – now outsourced to Salt Funds Management – appeared sound.

“The exposure we have had to Salt gives us assurance that this is an investible option, but given AMP Capitals’ decision to decline our review, we can not provide full-bodied analysis,” the report says.

Morningstar says the Salt investment style, focused on “finding undervalued companies based on fundamental research”, is similar to the strategy adopted by former AMP Capital NZ shares manager, Guy Eliffe.

Eliffe is now head of investment governance at the $33 billion Accident Compensation Commission fund.

According to Morningstar, at AMP Eliffe “posted decent returns under Price as well”.

“All told, Salt Funds Management, which took over the portfolio in May 2015, inherited a fairly strong record against the domestic equities benchmark,” the researcher says.

The Morningstar note says the AMP NZ shares fund total expense ratio of 1.03 per cent was below average with its performance fee of 10 per cent above the NZX50 index was “one of the fairest in the local market”.